NEWZ:///Volume down in 2016?/FHA liability/2-minute walk
- July 30, 2015

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Home prices approach pre-crisis peak

Latest home price index shows shrinking gap between 2006 and 2015

Excerpts:

Black Knight's latest Home Price Index report, based on May 2015 residential real estate transactions, showed that the U.S. HPI is now just 6.5% off the June 2006 peak of $268,000, and up over 25% from the market's bottom.

According to Black Knight's report, the HPI now rests at $251,000, up 1.1% over the previous month and up 5.1% over the previous year.

Read the rest of this story at:

http://www.housingwire.com/articles/34579-black-knight-home-prices-approach-pre-crisis-peak

To download the full report and graphics, which includes more detailed info on many cities- http://www.bkfs.com/CorporateInformation/NewsRoom/Pages/20150727.aspx

My comment: In the San Francisco Bay Area, most cities are well above the peak. My city, mid-range for the area, had price declines of 30-40% for detached homes and has been well above the peak levels for awhile. The median price for detached homes is around $750,000. However, lower priced homes in neighborhoods with significant numbers of foreclosures, had much greater percent declines than higher priced homes, with price declines of up to 80%. They have not returned to their peak levels yet. There is a feeding frenzy now for these lowest priced homes.

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Median-Priced Homes: What You Can Buy Right Now for $232,000

Excerpt:

Here are a few:

Address: 11317 Lady Slipper Ln, Richmond, VA

What you get: This "classic colonial" from 1984 comes with classy updates that include an eat-in kitchen with tile flooring, quartz countertops, and maple cabinetry.

Address: 1322 Glen Ave Colorado Springs, CO

What you get: Character in Colorado. Built in 1903, this home has been renovated and features a freestanding fireplace, wood floors, a back deck, and a pond.

Address: 520 Ivy St Grass Valley, CA
What you get: Located in a historic gold-mining town. Period details include a gas parlor stove, hardwood floors, and a covered porch.

My comment: A 2-hour drive from my house. Very popular city with retirees.

Click here for more info and see photos of the homes.

http://www.realtor.com/news/trends/homes-for-sale-at-the-median-price/

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The Housing Market Still Isn't Rational

Source: New York Times, opinion

Excerpt:

Home prices have been climbing. They have risen 27 percent nationally since 2012, even more in places like San Francisco. But why worry? If you accept the efficient markets theory - and believe that real estate is an efficient market - then these prices are based on "new information," even if you don't know what that information is.

The problem with this kind of thinking is that the efficient markets theory is at best a half-truth, as a voluminous literature on market anomalies shows. What's more, even that half-truth is grounded mainly in the stock market, which attracts professional investors who sometimes do make the market behave efficiently.

http://www.nytimes.com/2015/07/26/upshot/the-housing-market-still-isnt-rational.html

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Revised FHA Handbook 4000.1 effective 9/14/15

Are you ready for the changes? Get the facts!!

What you need to know and which FHA documents you need to read!!

Available in my August newsletter, sent out next Monday.

Many appraisers say they will quit doing FHA appraisals.

This means less competition for you!!

There is lots of confusion and mis-information about the changes. Some say there is too much required and others say there have not been many changes. What about attic, crawl space, and appliance inspections?

The author, Doug Smith, SRA, interviewed an FHA executive to find out what is really happening.

There are different FHA documents you need to read, not just Handbook 4000.1. It is very confusing, but Doug tells you what information you need and where to get it. He includes:

Which guide to use for what, and links to the reference material, including FAQs, Webinars, and SF Housing Appraisal Report and Data Delivery Guide
How to keep updated on changes
Attic, crawl space, and appliance inspections
Energy efficient items contributory value
Highest and best use - when all 4 criteria are required
FHA - UAD and Fannie guidelines

And lots more information.

WHAT DO YOU THINK ABOUT THE CHANGES? POST YOUR COMMENTS AT WWW.APPRAISALTODAYBLOG.COM AND READ WHAT OTHER APPRAISERS SAY!!

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Mortgage Bankers Association forecast - 9.5% volume declines in 2016

The MBA is predicting increases for purchase loans, but a decline in refis, for an overall decline in the future.

The MBA predicts a decline of 9.5% in total originations in 2016. From $1,281 billion to $1,170 billion. I assume this is due to a predicted increase in mortgage interest rates, which significantly affects refis.

Purchase originations are predicted to go up 9.2% and refis to go down 45%. Refis are now 45% of originations and are predicted to delcline to 32%.

Increasing rates and declining refis is what causes the significant ups and downs in lender appraisals.

What does this mean for you? Make money while you can. Subscribe to the Appraisal Today paid newsletter to get lots of ideas for increasing productivity. Look for non-lender work. Look for non-AMC lender work, as AMCs drop their fees when business slows doen. The paid newsletter has lots of info on non-lender work and non-AMC lender work. See above

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A 2-Minute walk may counter the harms of sitting

Excerpt:

With evidence mounting that sitting for long stretches of time is unhealthy, many of us naturally wonder how best to respond. Should we stand up, or is merely standing insufficient? Must we also stroll or jog or do jumping jacks?

A new study offers some helpful perspective, suggesting that even a few minutes per hour of moving instead of remaining in a chair might substantially reduce the harms of oversitting.

My comment: In my appraisal office I have always had the computers on tables separate from my desks because of my back problems. I move back and forth from computer to desk regularly. But, in my home office where I often work on these email newsletters, I only have a computer table. I don't have room for another table or desk. Not good for me. I am now making a commitment to these 2-minute walks. Looks like I will have to set a timer to buzz and remind me ;>

http://well.blogs.nytimes.com/2015/05/13/a-2-minute-walk-may-counter-the-harms-of-sitting/

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Warning: General Liability and FHA Appraisals

By Joanna Conde

Excerpt:

I called Peter Christiansen of LIA Insurance to ask him some questions about the new FHA requirements and the change from "should" to "must'. FHA appraisers are vulnerable to lawsuit because there is a greater incidence of default among FHA properties due to the high percentage of loan to value (97%).

However, not only are they more vulnerable for suits as the result of foreclosures, they are also more vulnerable for other suits because of the added requirements of FHA. Peter brought up the issue of general liability and the exposure that an appraiser faces by doing the things required by FHA.

The article discusses several lawsuits and encourages appraisers to get general liability insurance.

My comment: I have general liability insurance and have had it for many years. It does help me sleep better at night sometimes ;> Check with your insurance agent. It can help if you fall through an attic when doing the new required FHA inspection.

FYI, Liability Insurance Administrators offers general liability insurance premiums starting as low as $425. Info at www.liability.com/general_liability/

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HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go

Note: I publish a graph of this data every month in my printed newsletter, Appraisal Today. For more information or get a FREE sample issue go to http://www.appraisaltoday.com/products.htm or send an email to info@appraisaltoday.com . Or call 800-839-0227, MTW 8AM to noon, Pacific time.

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Mortgage applications increased 0.8 percent from one week earlier

WASHINGTON, D.C. (July 29, 2015) - Mortgage applications increased 0.8 percent from one week earlier, according to data from the Mortgage Bankers Association's (MBA) Weekly Mortgage Applications Survey for the week ending July 24, 2015.

The Market Composite Index, a measure of mortgage loan application volume, increased 0.8 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index increased 1 percent compared with the previous week. The Refinance Index increased 2 percent from the previous week. The seasonally adjusted Purchase Index decreased 0.1 percent from one week earlier. The unadjusted Purchase Index increased 0.2 percent compared with the previous week and was 18 percent higher than the same week one year ago.

The refinance share of mortgage activity increased to 50.6 percent of total applications from 50.3 percent the previous week. The adjustable-rate mortgage (ARM) share of activity decreased to 6.6 percent of total applications.

The FHA share of total applications decreased to 13.7 percent from 14.0 percent the week prior. The VA share of total applications decreased to 10.9 percent from 11.3 percent the week prior. The USDA share of total applications remained unchanged from 0.9 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($417,000 or less) decreased to 4.17 percent, the lowest level since June 2015, from 4.23 percent, with points increasing to 0.36 from 0.34 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $417,000) decreased to 4.12 percent, the lowest level since May 2015, from 4.16 percent, with points increasing to 0.35 from 0.33 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.98 percent, the lowest level since June 2015, from 4.00 percent, with points increasing to 0.26 from 0.17 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 3.39 percent, the lowest level since June 2015, from 3.43 percent, with points increasing to 0.38 from 0.34 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs decreased to 3.04 percent from 3.08 percent, with points decreasing to 0.37 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

If you would like to purchase a subscription of MBA's Weekly Applications Survey, please visit www.mba.org/WeeklyApps , contact mbaresearch@mba.org

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.

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Ann O'Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today
2033 Clement Ave. Suite 105
Alameda, CA 94501 Phone 510-865-8041
Fax 510-523-1138
Email ann@appraisaltoday.com